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Press release: A
generally open trade regime, but further agriculture liberalization
would promote world trade

This seventh Trade Policy Review of the European Communities (EC) has
been conducted in a friendly and comprehensive manner, and our
dialogue has been very constructive. We have greatly benefited from
the engagement of the EC delegation, led by Mr. Pierre Defraigne,
Deputy Director General DG Trade, the very insightful comments by our
discussant, Ambassador Don Stephenson, and the active involvement of a
large number of Members.

Members commended the EC on its continued efforts towards a liberal
trade regime and on its monetary discipline. These efforts have
contributed to a further decline in its already low inflation and to
external current account surplus in the last few years. Members
welcomed the ongoing recovery of the EC's economy following a slowdown
since 2001; they hoped that the recovery would be sustained, given the
positive impact this might have on unemployment and fiscal deficits
within the EC, and on the global economy in general. Members welcomed
the EC's strong commitment to, and active participation in, the
multilateral trading system, including its strong leadership in
striking a deal on the July Package. They expressed appreciation for
its substantial contribution to the WTO's Global Trust Fund for
technical cooperation, and for its non-reciprocal preferences to
developing countries under its GSP scheme and Cotonou Agreement, and
to LDCs under the Everything But Arms initiative. Nevertheless,
several members expressed concerns on its planned reforms of the GSP
scheme and hoped that it would be objective and consistent with the
WTO rules and principles. Members also noted that the EC's MFN trade
regime applied to only nine WTO Members because of its active
involvement in various preferential trade arrangements.

Members commended the EC on its liberal trade regime for
non-agricultural products. Some Members shared the EC's non-trade
justification for its Common Agricultural Policy (CAP). However, other
Members noted that, despite the ongoing reform of the CAP, mainly
through the decoupling of payments from production, agriculture
remained protected by high tariff rates, a complex tariff structure,
and by high levels of domestic support and export subsidies. Arguing
that such protection undermined economic efficiency and penalized both
EC tax payers and consumers, they urged the EC to further liberalize
its CAP. Several members also asked the EC to provide information on
its specific agricultural policy, including the reforms of sugar and
banana regimes.

Members noted the new opportunities provided by the enlargement of the
EC. Concerns were expressed about the ECís consistency with and
commitments to the WTO rules and disciplines as a result of its
enlargement to 25 members, in particular the need to provide adequate
information and compensation to Members. Various Members raised
concerns about the continued active use of contingency trade remedies
by the EC, and expressed fears that this might increase with the
elimination of textiles and clothing quotas at the end of this year.
Concerns were also expressed about the lack of harmonization within
the EC in areas such as internal tax rates, and certain services. The
EC's technical barriers to trade and SPS measures, including the new
REACH system for chemicals, were deemed stringent and burdensome.
Members sought further clarification on the EC's common fisheries
policy; the scheme for the GMOs and biotechnology products; customs
procedures; rules of origin; tariff quota administration; government
procurement; state aid and subsidies programmes; protection of
intellectual property rights, including geographical indications;
business regulation and competition policy; and on specific
activities, including energy, steel, financial services,
telecommunications, and transport.

Members appreciated the responses provided by the EC delegation, and
looked forward to receiving written answers on any outstanding
questions.

In closing, I would like to thank the EC delegation on its oral and
written response provided during the meeting. This Review has offered
the opportunity for a much better and updated understanding of the
EC's policies and practices, and for a collective appreciation of the
challenges it faces and its efforts to address them in a WTO
consistent way. The wide interest shown by Members, with many advance
written questions, interventions and high attendance, reflects the
vital importance of the EC to the multilateral trading system. It
appears that the main areas where many Members would like to have the
ECís positive and expeditious response are the WTO issues related to
its enlargement and the implementation of its agricultural and
technical regulations reforms. This would strengthen both its support
for the multilateral system and its widely recognized actions in
favour of developing countries, mainly those with a key interest in
agriculture.